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JQ Clothing will open its new location at 2120 Commercial Drive at the beginning of November.

Rising rents force Commercial Drive businesses to move

A Commercial Drive clothing store is the latest business moving due to rising rents. The Jean Queen, soon to be…

By Chelsea Novak , in Business , on October 29, 2013 Tags: , , ,

The Jean Queen will open its new location at 2120 Commercial Drive at the beginning of November.
The Jean Queen will open its new location at 2120 Commercial Drive at the beginning of November.

A Commercial Drive clothing store is the latest business moving due to rising rents.

The Jean Queen, soon to be known as JQ Clothing, is relocating a block from its current space at the end of October to take advantage of lower costs a few metres away.

“It’s stressful, but we just have a lot of people to help and we had a little bit of time, which is nice too. The renovating is more stressful that anything else,” said Corina Peterson, the owner of the shop.

Retail lease rates on Commercial Drive have risen gradually over the past three years and the owners of small businesses want more protection so that they are able to stay on the Drive.

During the first half of 2011, rates ranged from $25-40 per square foot, according to statistics provided by Margaret Bowden, a sales assistant at Colliers International. Now they range from $35-$50.

“It depends where you are on Commercial Drive,” said Conor Finucane, an agent with DTZ Vancouver Real Estate Ltd. “Near the SkyTrain, the rates are always going to be higher.”

Rates also depend on individual landlords and the improvements they’re willing to make to the building.

“There’s a lot of landlords who don’t want to do anything to their building. They don’t improve them, they don’t fix the plumbing and electricity, and the tenants end up paying for that, but maybe they keep the rate lower,” said Finucane.

Rising rates

Elsewhere in Vancouver, rates have risen more drastically.

Josie Henderson, an employee of The Jean Queen, said the store will hold a sale during its last two days at the old location.
Jean Queen employee Josie Henderson said the store will hold a sale during its last two days at the old location.

A recent Colliers International report revealed that average rents on Robson Street in downtown Vancouver  increased by 33 per cent between March 2012 and March 2013. Rates on Alberni Street increased by 43 per cent in the same period.

These streets are home to international chain stores that can afford the Alberni rates of $150 a square foot or the Robson rates of $200.

Commercial Drive, on the other hand, is populated by small businesses.

While rent increases there may be more gradual, owners are still having trouble keeping up.

Bigger but cheaper

The Flower Box moved a block at the end of September to a larger store with a lower rate.

“I didn’t foresee being able to take on another rent increase and my lease was up for renewal in February,” said owner Sacha Thompson.

She expected an increase because her landlord had raised her rent before and because he raised the rent for her neighbour, Little Nest, earlier in the year.

The Flower Box was just off Commercial Drive on Charles Street, but is now located directly on the Drive, where it receives more foot traffic.

Thompson attributes her cheaper lease rate to her new landlord.

“He really looks at the big picture. He looks at the community. He looks at long-term success,” she said.

Peterson also credits her new landlord as the reason she’s paying less. She now pays not only a lower rate per square foot, but a lower amount overall, even though she has an extra floor for storage.

BC’s Commercial Tenancy Act doesn’t include any provisions for restricting rent increases, while the Residential Tenancy Act allows rent increases only once a year and restricts the amount of each increase.

Thompson believes regulation would lead to greater security for small-business owners.

“You work in your space for 15 years and suddenly get a increase that puts you out of business and that doesn’t seem right,” she said.